BUILDING A SKILLED WORKFORCE STRONGER ......W.K. Kellogg Foundation. We thank them for their support...

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMYB

1BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY

TABLE OF CONTENTS

EXECUTIVE SUMMARY ...............................................................................................................................................3

To effectively compete in today’s economy, the South must help adults build skills .................................................... 4

The roadmap to southern skill building .......................................................................................................................... 4

WHY A SKILLS AGENDA FOR THE SOUTH? ...............................................................................................................5

New rules for a new southern economy.......................................................................................................................... 6

Most southern jobs require more than high school education, not a 4-year degree ..................................................... 7

Developing skilled workers can help southern cities and towns compete .................................................................... 7

Southern states must close their skills gaps to grow their economies ......................................................................... 7

The current economic climate requires a skilled workforce .......................................................................................... 9

Tackling barriers to work especially important in southern states ...............................................................................10

Address barriers to work in rural communities to help them prosper .......................................................................... 11

A skilled and thriving economy must be an inclusive economy ....................................................................................12

THE STATE OF SKILLS POLICIES IN THE SOUTH ....................................................................................................14

Southern states can better engage industry leaders in job training .............................................................................15

Georgia high-demand career initiative sector partnership grants ...............................................................................16

Key takeaways ................................................................................................................................................................19

Case study: Apprenticeship Carolina ............................................................................................................................ 20

Southern states have room to improve in helping adults secure postsecondary credentials .....................................21

Case study: Tennessee reconnect ................................................................................................................................. 22

Key takeaways ............................................................................................................................................................... 23

Case study: Arkansas career pathways ........................................................................................................................ 24

Southern states can strengthen workforce data systems to promote accountability and transparency .................. 25

A ROADMAP FOR SOUTHERN SKILL BUILDING ..................................................................................................... 26

A roadmap for state policymakers to close the skills gap and grow the economy ...................................................... 27

Vehicles for state policymakers to close the skills gap include goalsetting and a “skills cabinet”.............................. 29

ENDNOTES ............................................................................................................................................................... 30

BUILDING A SKILLED WORKFORCE FOR A STRONGER SOUTHERN ECONOMY2

The authors of this report are Stuart Andreason and Ashley Bozarth, Federal Reserve Bank of Atlanta, and Brooke DeRenzis, Melissa Johnson and Rachel Hirsch, National Skills Coalition, and Andrew Pack who supported this research on behalf of the Federal Reserve Bank of St. Louis.

This report was developed with input from an advisory group who we would like to thank for generously sharing their time, knowledge, and insight:

• Ted Abernathy, Economic Leadership LLC

• Anne Bacon, North Carolina Community College System

• Daniel Davis, Federal Reserve Bank of St. Louis

• Ed Franklin, Winthrop Rockefeller Foundation

• Allan Freyer, North Carolina Justice Center

• Garrett Groves, Austin Community College District

• Cinda Herndon-King, Atlanta CareerRise

• Waymond Jackson, Birmingham Business Alliance

• Mala Thakur, MDC

• Corey Wiggins, Mississippi State Conference NAACP

The views expressed in this report are those of the authors, and do not necessarily reflect the views of the Federal Reserve Bank of Atlanta, the Federal Reserve Bank of St. Louis, or the advisory group.

This research was funded by the Annie E. Casey Foundation and W.K. Kellogg Foundation. We thank them for their support but acknowledge that the findings and conclusions presented in this report are those of the authors alone, and do not necessarily reflect the opinions of these foundations.


EXECUTIVE SUMMARY


TO EFFECTIVELY COMPETE IN TODAY’S ECONOMY, THE SOUTH MUST HELP ADULTS BUILD SKILLS A new day has dawned in the South. No longer is a high school education and a willingness to work hard sufficient to secure a family supporting job. In fact, the majority of all jobs in the U.S. labor market require some postsec-ondary education or training. To effectively compete in today’s marketplace, states must have skilled workforces. For the southern United States, this new environment requires a shift. Economies once built on low-skill indus-tries must now compete globally for jobs that require training beyond high school. Most of these jobs are mid-dle-skill jobs, requiring education or training beyond high school but not a four-year college degree. Across the South, there are not enough workers trained to fill middle-skill jobs. This skills gap hurts businesses that are not able to fill positions. It hurts states because the lack of skilled workers makes it challenging to attract and retain new businesses. And the skills gap hurts low-wage, low-skill workers who are not able to advance their careers and move into good, middle-skill jobs.But the middle-skill gap isn’t insurmountable. Southern states could step up to the challenge of educating more of the region’s adults to close this gap. Focusing on grade school students alone won’t be enough to close the skills gap now. If each and every one of the South’s graduating high school students were to stay in the region and train for open jobs that require postsecondary education, there would still be unfilled positions.If southern states are going to close their skill gaps, they must provide opportunities for all adults — includ-ing people of color — to increase their education and training. More than four in ten Southerners are people of color. And people of color will make up the majority of the U.S. population by 2044. To create a skilled and

“To create a skilled and thriving southern economy, state leaders must create an inclusive workforce.

”

thriving southern economy, state leaders must create an inclusive workforce.To close their skills gaps, southern states must also address people’s barriers to work. The history, geography, and policy decisions of the South help create obstacles that prevent people from working, building their skills, and advancing their careers. These barriers include higher poverty rates, burdensome transportation costs, onerous child care costs, high incarceration rates, and restrictive policies for previously incarcerated people. These obsta-cles can be even more daunting in rural areas, where there may be additional challenges like limited job openings and limited broadband service.

THE ROADMAP FOR SOUTHERN SKILL BUILDINGTo help states realize economic improvement, this report includes a roadmap of critical steps states may take to establish policies that could help them close their skills gaps. State policymakers could:• Use workforce development strategies, such as sector

partnerships and work-based learning, as economic development tools capable of meeting industry needs.

• Invest in communities to implement high-quality workforce development strategies at the local level.

• Establish job-driven financial aid programs that are available to a wide range of students.

• Form career pathways and include comprehensive sup-portive services that enable completion.

• Create state data systems that provide accountability on how training programs are helping residents with diverse needs get skilled jobs.

State policymakers could also consider easing their path to implementation of these steps by taking the following actions, which could help bring a broad set of stakehold-ers to the table to unite around a common plan for skills development:• Set a bold goal for increasing the number of adults

trained for skilled jobs. • Create a cross-agency “Skills Cabinet,” and task agency

leaders with working together to develop and imple-ment a strategy for meeting the state’s postsecondary attainment goal for adults.

This report discusses specific policies that states could adopt to develop skilled workforces and fully realize the economic potential of local businesses and workers. Examples of current policies from southern states are also included, proving that these policy changes may be implemented in the region’s context. Residents, businesses, and state economies are counting on their leaders to create policies that will help them thrive now and in the future. Southern state leaders should examine and consider taking the necessary steps to close their skills gaps.

MOST JOBS IN THE SOUTH ARE MIDDLE-SKILL JOBSJOBS BY SKILL LEVEL, AMERICAN SOUTH, 2015

Source: NSC analysis of Bureau of Labor Statistics Occupational Employment Statistics

16%

29%55%

MIDDLE-SKILL

HIGH-SKILL

LOW-SKILL


WHY A SKILLS AGENDA FOR THE SOUTH?


NEW RULES FOR A NEW SOUTHERN ECONOMY The majority of jobs in the U.S. labor market require some postsecondary education or training.2 To effectively compete in today’s marketplace, states must have skilled workforces.For states in the southern United States, this new envi-ronment requires that economies once built on low-skill industries compete globally for jobs that demand training beyond high school. Southern states must invest in skills across all races, genders, and geographies for the region to succeed.The south’s economy used to be based on inexpensive labor and land that drove agriculture and extractive indus-tries. Prior to the Civil War, cotton and other agricultural staples produced by enslaved people who were not paid wages were profitable and southern states did little to diversify their industries as other states did.3 Following the Civil War, southern state economies expanded beyond agriculture to include some basic manufacturing and nat-ural resources extraction, but the region principally com-peted on the basis of low wages, limited unionization, and tax credits.4 These industries, which tend to be lower skill, are now declining.5 During the 1960s and 1970s, the United States econ-omy began to shift from centering on producing physical goods to one focused on technology, innovation, knowl-edge, and service. Over the past thirty years, American

communities became increasingly defined by their resi-dents’ level of education. Now places with the “right” mix of industries and skilled workers attract good jobs while those at the other end of the spectrum are stuck with a disproportionate share of low-wage, low-skilled jobs that offer workers little advancement.6 In other words, economic development and workforce development are inextricably linked in the modern economy. Southern states can no longer compete mainly on cheap land, low-wage labor, and lower taxes.

THE SOUTHERN UNITED STATES

WAGES OF SOUTHERN STATES STILL TRAIL THE REST OF THE NATIONSOUTHERN STATES V. NON-SOUTHERN STATES 2016 MEDIAN ANNUAL WAGE

“In the South, many jobs that could be done

with only a high school degree

—already in decline before

2007 —were lost and are not

coming back.

” Carnevale and Smith, 2012

WASHINGTON, D.C.

$20,000

$25,000

$30,000

$35,000

$40,000

Southern States Average

Non-Southern States Average

$35,904 $37,799


This definition of the southern states is established by the U.S. Census Bureau.1


Some southern cities have attempted to respond to the shift in the economy by attracting and retaining skilled workers. However, the legacy of low-skill and low-wage is still present in the South. Even after adjusting for cost of living, a recent analysis found that average earnings in southern metro areas lag behind the rest of the country.7 To ensure that workers, families, and businesses prosper, southern states need to adapt to the new economy and invest in skill building for adults. Today’s jobs demand more skills and training than they once did. Stronger basic proficiency in math, teamwork, problem-solving, communicating, and complex thinking are now nec-essary not just in jobs that require advanced degrees but also in the middle of the labor market — jobs that require some education or training beyond high school but not a four-year college degree.8 Moreover, the mid-dle of the labor market now requires additional techni-cal skills and training.9

MOST SOUTHERN JOBS REQUIRE MORE THAN HIGH SCHOOL EDUCATION, NOT A 4-YEAR DEGREEMiddle-skill jobs, which require some education or train-ing beyond high school but not a four-year college degree, account for over half of all jobs in the South. Education and training for middle-skill jobs can vary from short-term job training programs or two-year degree programs often offered by community or technical colleges or other community training providers, to apprenticeship or on-the-job training with an employer. While key indus-tries vary across southern states, their labor markets have a common feature: middle-skill jobs hold the plurality of jobs in each state. Many of these middle-skill jobs are “opportunity occu-pations,” paying at least the national median wage (roughly $37,000 per year in 2016) and requiring less

than a four-year degree.10 The proportion of middle-skill opportunity occupations varies across the South, less in metro areas with a prevalence of low-wage work like Miami, and often more in areas with large produc-tion or logistics and transportation industries such as Birmingham and Baton Rouge.

DEVELOPING SKILLED WORKERS CAN HELP SOUTHERN CITIES AND TOWNS COMPETEThe ability to adapt to the new skills-based economy has important consequences for the overall growth of the South. The South’s population and economy has grown over the past several decades, but the growth hasn’t been even across the region. Metropolitan areas in the south vary significantly — some have high concentrations of skilled workers and booming economies and others are older industrial cities undergoing significant economic restructuring.11 Historically industrial cities once reliant on old models of manufacturing have struggled to develop the skilled workforce required by today’s economy. The majority of good jobs in these cities, after all, were attainable with only a high school education. Now, lower education levels among residents hampers job creation in these areas.12 To help reinvigorate older industrialized cities, states could invest in training that gives low-income workers the skills they need to compete for jobs that pay family sustaining wages. These skilled jobs can help attract more workers and revitalize these regions.13 Many very small cities, towns and rural areas have also seen significant economic change, driven by new tech-nologies that aided in automating and mechanizing the agricultural and manufacturing industries. Population growth has been particularly slow in farming and mining communities and has declined in rural areas dependent on manufacturing.14

SOUTHERN STATES MUST CLOSE THEIR SKILLS GAPS TO GROW THEIR ECONOMIESThe desire for growing, thriving communities is strong motivation for states to support skills training. Across the South, there are not enough workers trained to the middle-skill level to fill middle-skill jobs. This creates a middle-skill gap in each of the Southern states.The skills gap hurts employers. It keeps local businesses (which create the vast majority of new jobs in states15) from filling skilled positions and growing. A lack of skilled workers may also make it challenging to attract and retain new businesses who are looking to relocate to areas that can meet their skill needs. The skills gap also hurts workers by limiting opportunities for lower-skilled workers to advance in their careers and secure family supporting work, and keeps lower-skilled people without jobs on the sidelines of the labor market.

MOST JOBS IN THE SOUTH ARE MIDDLE-SKILL JOBSJOBS BY SKILL LEVEL, AMERICAN SOUTH, 2015


16%

29%55%

MIDDLE-SKILL

HIGH-SKILL

LOW-SKILL


Efforts to close the skill gap must be inclusive of all work-ers. By providing more equitable pathways to good skilled jobs, Southern states can strengthen their economies.

Adults and out-of-school youth are key to closing the skills gapThe middle-skill gap isn’t insurmountable. There are proven, common-sense strategies that southern states could employ to close it and help businesses and work-ers succeed. Many states turn to their K-12 education

systems as a starting place for closing their skills gaps. While providing high school students with career educa-tion is critical, focusing on K-12 alone won’t be enough to close the skills gap. For example, even if each and every one of the South’s graduating high school students were to stay in the region and train for open jobs that require postsecondary education or training, there would still be unfilled positions.16 To close the skills gap, these states must also upskill the existing adult workforce. Southern states represent eight of the ten states with the highest proportion of work-ing-age adults with no more than a high school educa-tion. Preparing lower-skilled adults for middle-skill jobs will require action on behalf of state policymakers.Southern states make up nine of the top twelve states with the largest share of “opportunity youth” — young adults between the ages of sixteen and twenty-four who are not working and not in school. Opportunity youth are missing a critical opportunity to build skills for their future careers.17 Efforts that focus on opportunity youth should also address the unique context and challenges facing young people of color, since opportunity youth are dispropor-tionately nonwhite. Higher unemployment rates among young African Americans help drive this disparity, and are likely due to a combination of factors, including dis-crimination and a higher likelihood of living in areas of concentrated poverty.18,19,20 These challenges can also con-tribute to lower rates of high school completion among

MOST SOUTHERN JOBS ARE MIDDLE-SKILL JOBS, BUT NOT ENOUGH WORKERS ARE TRAINED TO THE MIDDLE-SKILL LEVEL

Source: NSC Analysis of Bureau of Labor Statistics Occupational Employment Statistics by State, May 2015 and American Community Survey data, 2015.

“If each and every one of the South’s

graduating high school students

were to stay in the region and train for open

jobs that require postsecondary

education or training,

there would still be unfilled

positions.

”

LESS THAN 5%

6% - 20%

21% - 35%

36% - 50%

51% - 70%

PERCENT OF POPULATION CHANGE 1990-2007WASHINGTON, D.C.

SOUTHERN STATES WITH MORE SKILLED WORKERS HAVE HIGHER POPULATION GROWTH

Source: U.S. Census Bureau

High-Skill Jobs

High-Skill Workers

Middle-Skill Jobs

Middle-Skill Workers

Low-Skill Jobs

Low-Skill Workers

0% 10% 20% 30% 40% 50% 60%


young people of color.21 Some youth employment pro-grams have been shown to be effective in addressing these disparities for opportunity youth and efforts to close the skills gap should include an awareness of the most suc-cessful programs.

THE CURRENT ECONOMIC CLIMATE REQUIRES A SKILLED WORKFORCEThe U.S. labor market is booming and unemployment is nearing record lows. Lower unemployment rates make it tougher for employers to find workers with the right skills. These economic conditions heighten the imperative for policymakers to evaluate and consider skill-building strategies for their residents.

Lower unemployment rates create hiring challenges Unemployment is lower in 2018 than it was before the recession of 2007-2009. Some metropolitan areas in the South (Nashville, Austin, and Birmingham) have some of the lowest unemployment rates in the nation.22 Many economists believe that low unemployment rates signal an economy that is near “full employment.” Many people who lost jobs during the recession are now back to work, making it difficult for some employers to identify and hire skilled employees.To meet business needs in an economy with fewer job-seekers, state policymakers could consider policies that facilitate the upskilling of entry-level workers who need more training to advance within their careers and

earn family supporting wages. A recent survey found that while two out of three adults in the U.S. with lim-ited reading, math, or digital problem-solving skills are employed, most have low earnings.23 Though overall unemployment rates are lower than they were pre-recession, unemployment rates for black and Latino workers in the region continue to be higher than for their white counterparts. States should work to ensure that all residents have access to skilled jobs and

SOUTHERN STATES LEAD NATION IN SHARE OF ADULTS 25 TO 64 YEARS WITHOUT EDUCATION BEYOND HIGH SCHOOL

PERCENT OF HIGH SCHOOL DEGREE OR LESS, POPULATION 25-64 YEARS

26% - 30%

31% - 35%

36% - 40%

41% - 45%

46% - 62%

Source: U.S. Census Bureau/American Fact Finder. EDUCATIONAL ATTAINMENT BY EMPLOYMENT STATUS FOR THE POPULATION 25 TO 64 YEARS. 2012-2016 American Community Survey

“With low unemployment rates and fewer skilled people looking for jobs, many employers have a harder time finding qualified employees.

”

SOUTHERN STATES LEAD IN THE SHARE OF YOUTH 16 TO 24 YEARS NOT ATTENDING SCHOOL OR WORKING

U.S. UNEMPLOYMENT LOWER THAN PRE-RECESSION RATES

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics.

National KIDS COUNT

PERCENT OF YOUTH NOT ATTENDING SCHOOL AND NOT WORKING, POPULATION 16-24

8%

9% - 11%

12% - 13%

14% - 17%

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2007 2008 2009 2010 2011 2012 2013 2014 2 015 2016 2017

Southern States Average

National Average

Perc

ent U

nem

ploy

men

t Rat

e


that postsecondary education, training and employment strategies are helping to close these racial disparities in unemployment.

Tighter labor markets underscore the importance of skills and addressing barriers While states have record low unemployment rates for residents who participate in the labor force, they have also seen an increase in people who have been sidelined from the labor market. Many state policymakers in the south-ern U.S. have expressed concern over their states’ lower labor force participation rates, which, despite a booming labor market, are lower now than they were before the Great Recession.24,25 While there are likely many reasons for a lower labor force participation rate, it’s likely that at least some people who want jobs have stopped looking for work because they don’t have the right skills and sup-ports to find a family-supporting, full-time job.State policymakers should consider ensuring that work-force development polices work in tandem with other public policies to address barriers to work, including transportation, child care, and criminal records. In fact, the country’s major piece of federal workforce devel-opment legislation — the Workforce Innovation and Opportunity Act (WIOA) of 2014 — enacted with over-whelming bipartisan support, requires states to develop workforce development strategies for people with signifi-cant barriers to employment. In a tight labor market, such as we have today, many employers are more willing to hire workers who lack work experience if they have the foun-dational skills, technical training, and supports necessary to succeed on the job.

TACKLING BARRIERS TO WORK ESPECIALLY IMPORTANT IN SOUTHERN STATESThe South’s history, geography, and policy environment have combined to prevent many people from working, building their skills, and advancing their careers.For example, the legacy of low-skill, low-wage work is still observable in the region’s high poverty rates. Eight of the ten states with the highest poverty rates are southern states. This is particularly troubling given that a family of three with one child had to earn less than $19,318 in 2016 to officially live in poverty.Most counties with persistent poverty, where at least one in five residents has lived in poverty over the last thir-ty-five years, are also in the South. Though the largest share of people living in poverty in the South are white, poverty rates are higher among Native Americans (22%), African Americans (23.5%), and Latinos (21.7%), in the region compared to their white counterparts (10.9%).26 Poverty can create barriers to work, including lack of access to transportation and child care. People living in poverty also tend to have lower levels of educational attainment, which in turn constrains a region’s ability to attract middle-class jobs. However, as southerners are able to move out of poverty, they can spend more money at local businesses and contribute more to the economy. Transportation presents a significant barrier for low-in-come workers across the South. An analysis shows that lower-income households who spend over two-thirds of their incomes on housing and transportation are concen-trated in the South. Many areas in the South perform relatively well on housing costs alone, but when transpor-tation costs are included, it becomes evident that these two expenses are burdensome for many families in the region.27 The time it takes to get to work also presents a particular challenge for workers in rural areas. In addition to transportation, caretaking responsibilities keep people from participating in the labor force. Child care may not be readily available during work hours and quality care is often expensive and in high-demand. On average, child care expenses can consume more than 10 percent of household income for married cou-ples and nearly 36 percent of income for single-parent households.28

In fact, a recent U.S. Bureau of Labor Statistics study found that working age women not in the workforce claim home responsibilities as the main reason they’re not working.29 Child care can be an especially acute challenge for single-parent households, which make up a dispro-portionate share of households in many southern states and a disproportionate share of those attending commu-nity colleges.30 By investing in child care support during training and after parents find a job, states could help more people enter the labor force.

Persistent Poverty Counties

Nonmetro County

Metro County

MOST PERSISTENTLY POOR COUNTIES ARE IN THE SOUTH

Source: U.S. Census Bureau, Historical County Level Poverty Estimates Tool (1960-2010); U.S. Census Bureau/American Fact Finder. Selected Economic Characteristics. 2012-2016 American Community Survey


ADDRESS BARRIERS TO WORK IN RURAL COMMUNITIES TO HELP THEM PROSPER

MOST SOUTHERNERS LIVE IN METRO AREAS, BUT RURAL POPULATION IS SIGNIFICANT

Source: U.S. Census Bureau (Population); 2015 ERS County Typology Codes. USDA Economic Research Service using data from Bureau of Economic Analysis and U.S. Census Bureau (Metro/Nonmetro).

% Nonmetro Population

0% - 10%

11% - 25%

26% - 35%

36% - 50%

51% - 70%

Over three-quarters of people in the South live in metropolitan areas. Yet in Arkansas, Kentucky, Mississippi, and West Virginia, 36 percent or more of the population lives in rural areas. In these areas, challenges that apply across the southern states can present an even greater burden.

As an example, limited job openings can be a challenge in rural communities where there are neither a diverse set of industries nor a concentration of businesses. A lack of access to high-speed inter-net service further constrains job openings and economies in rural areas.33 To grow the economies in communities with limited labor markets, states should consider developing a skilled workforce and diversifying their industry base. Tools like broadband internet service could be used to attract employers and connect prospective employees to education and training.

Rural communities could also deploy strategies for connecting people with nearby metropolitan economies in a manner that provides mutual benefit, such as connecting metro employers to rural employees available to work remotely.34 States could closely coordinate economic development and workforce development strategies to ensure that job creation and talent development go hand-in-hand; in doing so, states could diminish brain drain while providing more economic opportunity to residents and businesses.35

Transportation costs can be especially acute burdens in rural areas. Many rural areas have no pub-lic transportation options, while the distance between workers’ homes and their workplaces makes access to an automobile a necessity. States and localities could expand transportation options to connect workers with available jobs.

A lack of quality child care options can also be a unique challenge to rural areas. Nearly 60 percent of rural Census tracts qualify as child care deserts — areas with little or no access to licensed child care. This compares to 44 percent of suburban areas. In these areas, a lower share of mothers participate in the workforce.36 States could incentivize the expansion of child care options in rural areas so that more parents can work.


State policies regarding criminal justice also impact peo-ple’s ability to work. The South has some of the highest incarceration rates in the country. Alabama, Arkansas, Louisiana, Mississippi, and Oklahoma outpace all other states in the nation in regard to male imprisonment rates, and Florida and Texas also have relatively high incar-ceration rates, which is challenging given their large populations.31 People who have been incarcerated, have a criminal record, or have otherwise been involved with the crim-inal justice system face major challenges finding work. To widen their pool of potential workers and create more economic opportunity for their residents, states could take steps to remove barriers to employment for peo-ple who were formerly incarcerated. For example, some states have “ban the box” laws that prohibit work applica-tions from asking as a yes/no question about whether the applicant has been convicted of a crime. Some states have also pursued expungement of criminal records for certain ex-offenders who have maintained a clean record.Especially low education rates create yet another barrier for southern states. Four of the five states that have the highest proportion of working age adults with no for-mal education beyond high school also have the highest unemployment rates.32 Declining industries like mining and extraction, forestry, agriculture, and durable goods manufacturing are also more prevalent in these states, meaning that there may be fewer jobs available, especially for those with limited skills.

A SKILLED AND THRIVING ECONOMY MUST BE AN INCLUSIVE ECONOMYLike the U.S. as a whole, the South is becoming more racially and ethnically diverse. With these changes, southern states will only succeed in developing a skilled workforce that positions the region to compete economi-cally if leaders create equitable pathways to postsecondary credentials and careers for all residents.

Southern states are racially and ethnically diverseWhile the majority of Southerners are white, African Americans and Latinos each account for nearly one-fifth of the South’s total population. In fact, more African Americans live in the South than in any other region of the country and the South has the fastest growing Latino population of any region.37 Estimates indicate that people of color will make up the majority of the U.S. population by 2044.38 “Reverse migration” of black people from the north to the south in the 1990s helped shape this racially diverse South, with more African Americans moving to the South than leaving.39 Widespread job growth in the South during the 1990s and in the early 2000s before the Great Recession attracted both Latino and Asian people as well.40

Persistent racial and ethnic disparities in educational attainment and employment hurt the economyDespite these changes, stark racial and ethnic dispar-ities persist across the South when it comes to educa-tional attainment and employment. On average, Latinos and African Americans have lower education levels than whites, and have faced greater barriers to pursuing post-secondary education and training. Lower incomes and wealth among these groups impedes access to college and to training programs. In fact, when families of equal wealth41 — as opposed to income — are compared, stud-ies show racial disparities in rates of four-year college graduation disappear.42 Racial disparities in unemployment are even more strik-ing. African Americans face higher rates of unemploy-ment than any other racial or ethnic group, a fact that cannot be entirely explained by differences in educa-tional attainment.43 Since people who are unemployed are actively looking for work, higher unemployment rates suggest that Black Southerners face systemic barriers in the labor market, including bias and discrimination.44 These disparities stand in the way of realizing the full potential of a skilled economy. To ensure the strongest possible workforce, policymak-ers could evaluate access to job training, financial aid and other training supports by race and ethnicity. Where gaps exist, policymakers could review state policies and engage community leaders to determine the best solutions for increasing access.

“The South will only succeed in developing

a skilled, competitive workforce if

leaders create equitable

pathways to postsecondary credentials and

careers for all residents.

”

MORE THAN 4 IN 10 SOUTHERNERS ARE PEOPLE OF COLOR

Source: U.S. Census Bureau (Population); 2015 ERS County Typology Codes. USDA Economic Research Service using data from Bureau of Economic Analysis and U.S. Census Bureau (Metro/Nonmetro).

WhiteAlone58%Black or

African American

Alone19%

Latino17%

Asian Alone3%

Indian and Alaska Native Alone

1%

Two or More Races

2%


ASIAN

Less than 5%

6% - 8%

9% - 11%

12% - 15%

% Unemployment Rate by Race/Ethnicity

BLACK

HISPANIC WHITE

SHARE OF ADULTS WITH ONLY A HIGH SCHOOL EDUCATION DIFFERS BY RACE/ETHNICITY

STARK DIFFERENCES IN UNEMPLOYMENT RATES BY RACE/ETHNICITY

Source: U.S. Census Bureau/American Fact Finder. Sex by Education Attainment for the Population 25 Years and Over. 2012-2016 American Community Survey

Source: U.S. Census Bureau/American Fact Finder. Employment Status. 2012-2016 American Community Survey

ASIAN

Less than 35%

36% - 45%

46% - 60%

61% - 75%

% High School Degree or Less by Race/Ethnicity

BLACK

LATINO WHITE


THE STATE OF SKILLS POLICIES IN THE SOUTH


State leaders could adopt policies that develop a skilled workforce and fully realize the economic potential of local businesses and workers. Many southern states have already started to create strategies for closing skills gaps. These include polices that promote industry engagement in training, as well as policies that ensure that postsec-ondary institutions are equipped to train today’s students — including working adults and people without jobs who are looking to get back into the workforce — for mid-dle-skill jobs. Federal laws like WIOA, as well as major federal and philanthropic grants, have driven some of this innovation. However, the breadth, depth, and reach of skills policies varies across the region, with the weakest policy infra-structure in the mid-south states of Alabama, Louisiana, and Mississippi, as well as the Appalachian states of Kentucky and West Virginia.45 Overall, a stronger work-force development policy infrastructure could help south-ern states grow existing businesses, attract new ones, and provide economic opportunity to more people.

SOUTHERN STATES CAN BETTER ENGAGE INDUSTRY LEADERS IN JOB TRAINING Policies that promote industry-driven training ensure that local businesses, including small- and medium-sized companies, are partners in a region’s workforce training strategies. Examples include state policies to support sec-tor partnerships and work-based learning. These policies are critical for ensuring that workforce training is “indus-try-driven” — responsive to the changing needs of the labor market. They are also key for creating a hiring net-work for workers who are building their skills. By setting policies that develop and scale industry-driven training in communities across their state, policymakers can improve the odds that employers can hire workers with the right skills and that workers are training for real jobs.

Sector partnership policies help ensure training matches open jobsSector partnerships bring together multiple employers within an industry to collaborate with community and technical colleges, schools, workforce agencies, commu-nity organizations, and others to align training with the skills needed for that industry to grow and compete. By working with training providers to develop or modify programs that respond to specific industry needs, these partnerships create a pool of skilled workers for multiple employers within an industry, and create opportunities for workers to train for and access skilled jobs. Rigorous evaluations of sector-based training that offers indus-try-recognized credentials and engages employers have demonstrated results: increased training completion, cre-dential attainment, employment, and earnings, including for unemployed and low-income workers.46

As part of a broader sectoral approach to economic development, sector partnerships can help states attract new businesses and retain existing ones. States could use sectoral economic development strategies to support the growth of businesses in target industries by providing supports for a range of activities that make an industry competitive. These include supports for technology trans-fer, research and development, industrial processes, and skills training. North Carolina’s Biotechnology Center is an example of a sectoral economic development strategy that includes skills training. The Center supports the growth of the state’s biomanufacturing, life sciences, and pharmaceuti-cal businesses by providing services that help those busi-nesses conduct research, develop new products, and train employees with cutting-edge skills.47 The BioNetwork sector partnership is an integral part of the Center’s talent development supports. Through the network, the North Carolina Community Colleges work closely with life science businesses and other partners to develop sector-specific education and training. North Carolina invests $4 million annually in state funds to support the BioNetwork. The state’s sectoral approach to developing the life sciences industry — and the strong emphasis it places on training the workforce for the sector — have made North Carolina a leader for commercial bioscience.Other states have adopted policies to support and scale sector partnerships, even if they have not yet integrated sector strategies into their economic development efforts.

MANY SOUTHERN STATES HAVE SECTOR PARTNER-SHIP POLICIES, FEW INVEST THEIR OWN DOLLARS

2Use state dollars to

support sector partnerships

8Provide funding to

develop and operate local partnerships

9Southern states with sector

partnership policies

16Total southern states

(not including DC)


GEORGIA HIGH-DEMAND CAREER INITIATIVE SECTOR PARTNERSHIP GRANTS

In 2011, the Georgia Department of Economic Development (GDEcD) met with employers and economic development stakeholders about what most influences business expansion and reloca-tion decisions. While site selection and tax incentives were important considerations, access to a skilled and educated workforce was the prevailing factor in the majority of regions.

To better align economic development with workforce development, Governor Deal launched the High Demand Career Initiative (HDCI) in 2014, which brought together postsecondary educational insti-tutions and private sector employers to discuss workforce challenges. GDEcD, which houses HDCI, teamed with the Carl Vinson Institute of Government to engage stakeholders from the University System of Georgia (USG) and the Technical College System of Georgia (TCSG) and more than 120 private sector employers throughout the state. At a total of seventeen public meetings, employ-ers identified current and projected high-demand career sectors in Georgia, as well as associated high-demand skills and attributes. To expand the reach of this conversation, GDEcD also developed an online workforce needs assessment with questions similar to those asked during public meetings. This ongoing, publicly available questionnaire allows any Georgia employer to report and update their workforce needs.

These meetings and assessments determined specific skills gaps across high-demand sectors and moved HDCI beyond data collection and into the next two-pronged solution development phase. First, GDEcD formed five HDCI industry task forces for film, aerospace, logistics, construction, and IT. Working groups of industry-related stakeholders meet regularly to address ongoing workforce issues, such as how to expand apprenticeships and other work-based learning opportunities in the construction indus-try. Second, GDEcD established the HDCI Sector Partnership Grant using $3 million from the Governor’s WIOA Reserve Funds. This grant program aims to engage communities in workforce solutions by helping local partners build and maintain regional sector partnerships. Starting in 2016, Georgia’s twelve eco-nomic development regions could apply for grants up to $250,000 with a 10 percent local match require-ment. The grant is strictly for capacity building (i.e., hiring “regional convener” employees or consultants) to create a better system of collaboration among regional workforce partners.

Grant applications were required to identify high-demand industry sector(s) using labor market information and plans to address employer engagement, career pathways, WIOA-defined special populations, partnership sustainability, and how the partnership will leverage a 10 percent required local match, and other existing state workforce resources. The applications also needed to desig-nate a leader of the sector partnership and letters of participation from: at least five regional indus-try employers; local postsecondary institutions; the K-12 school system; the Georgia Department of Labor office; the Georgia Vocational Rehabilitation Agency; the chamber of commerce or economic development professionals; and the Department of Economic Development existing industries rep-resentative. Additional partners, such as community-based organizations (CBOs) and local social service agencies, were strongly encouraged.

Grants were available across the state, such that one region’s allocation did not diminish funding to other regions. To assist local partners with the grant application process, GDEcD hosted sector strat-egy trainings and follow-up regional workshops, during which staff shared labor market data to help regions choose an industry sector. A publicly available HDCI Sector Partnership Guide lays out clear steps to identify high-demand industry sectors and develop partnerships between public and private sectors. To date, eleven of twelve regions have applied for and received grant funding.


One particular grant recipient, HDCI Metro Atlanta (HDCI-MA), is focused on building employer-led partnerships in three industry sec-tors: healthcare; information technology; and transportation, distribution and logistics. Atlanta CareerRise, a regional workforce funder collabo-rative, is contracted to serve as the partnership leader and hired a full-time HDCI program direc-tor and part-time industry sector consultants. Since grant funding began in mid-2017, HDCI-MA has convened over thirty employers (still expand-ing), as well as academic institutions, chambers, economic developers, CBOs, government agen-cies, and local workforce development agencies. Sector leads are conducting employer visits to introduce the initiative and understand current and future workforce needs. They are also con-vening sector work groups with key non-employer stakeholders including chambers of commerce and economic development, K-12 and postsecondary education, government agencies, community providers and local workforce development boards. Combined, these activities will create an environ-mental scan that will lead to sector roadmaps and strategic priorities. The healthcare sector group, which began before the grant in 2013, already has well established employer and partner councils and strategic priorities. It has developed workforce development programs for the frontline, mid-career, and professional levels expected to be implemented in 2018.

HDCI has been successful in collecting data about skills gaps and other workforce issues, organizing sector task forces and allocating funding for local communities to build and maintain sector partner-ships. At the same time, this collaborative effort represents a paradigm shift for many stakeholders and comes with unique challenges across the twelve regions. Stakeholders may be accustomed to operating in their own workforce silos, such as K-12 schools, postsecondary institutions, social ser-vice agencies, and workforce training centers. In regions that cover larger areas, collaborative efforts and resources may be centered in the highest-populated city or town with less attention focused on rural areas. Socioeconomic barriers like limited transportation and geographic barriers like the North Georgia mountains may affect partners’ ability to participate. Facilitators are tasked with forming an inclusive strategy that engages all potential partners from across the entire region.

While there are currently no dedicated dollars beyond the initial $3 million, HDCI staff expect to reevaluate the grant in 2019 and consider extending funding given a variety of factors including pro-gram impact, staff bandwidth and general political will. With or without ongoing funding from the state, identifying other sources of funding is crucial since the grant is limited to capacity building. As trust and collaboration builds among partners in the chosen high-demand sector, it is up to these stakeholders to invest in actual program development that will increase economic opportunity for residents and produce a talent pipeline for regional employers.


Such policies provide investment, technical assistance, and guidance to help communities develop and maintain sector partnerships as a key vehicle for engaging employ-ers in sector-specific training. In fact, nine of the sixteen southern states have adopted polices to provide ongoing support to local sector partnerships in multiple indus-tries (Florida, Georgia, Kentucky, Maryland, Mississippi, North Carolina, Tennessee, Texas, and Virginia).48 It is not surprising that more than two-thirds of southern states have adopted sector partnership policies. WIOA requires states to support the development of such part-nerships at the local level. Indeed, under WIOA, states can use funds available to the governor to support a num-ber of activities, including sector partnerships. Of the nine southern states with a sector partnership policy, eight provide funding to support the develop-ment and operation of local partnerships.49 However, only two of these eight use state dollars to support local sector partnerships in multiple industries. Maryland and

Tennessee have each passed state legislation that provides a robust framework for sector partnerships, appropriating $8 million and $10 million respectively in state funds to provide competitive grants for partnership development and maintenance. The remaining six states use federal WIOA funds rather than state dollars. The amount of WIOA dollars reserved by these states for sector partnership spending widely varies, from $3 million in Georgia to just $350,000 in Kentucky. Meanwhile, Virginia provides technical assis-tance to local areas who want to create sector partner-ships, but does not dedicate federal or state dollars for the specific purpose of supporting sector partnerships.

Apprenticeship and other work-based learning policies enable workers to train on the jobWork-based learning gives workers the opportunity to build new skills while earning a paycheck. Through learning that happens on the job, workers can gain a new

“Over the course of his or her

career, a person who participated

in a registered apprenticeship

earns about $300,000 more

than someone working in the

same field who was not an apprentice.

”


credential and earn higher wages associated with their new skills. Apprenticeship is the most well known form of work-based learning, blending classroom learning with worksite training to get workers the skills they need while they’re on the job; other forms include incumbent worker training, on-the-job training, and paid internships for young adults.Work-based learning pays off for both businesses and workers. For businesses, work-based learning programs reduce recruitment, training, and supervision costs, as well as employee turnover.50 In fact, registered appren-ticeship is a preferred form of training among firms that use it, with 94 percent of employers reporting they would recommend it as a strategy to other employers.51 Workers also benefit by gaining skills and credentials with value in their industry while earning income. Over the course of his or her career, a person who participated in a registered apprenticeship earns about $300,000 more than someone working in the same field who was not an apprentice.52 Since these programs give workers the chance to “earn and learn,” without incurring student debt, they put workers on a path to the middle class with-out the burden of having to choose between advancing their careers and supporting their families. In recent years, work-based learning has received increas-ing attention as a workforce development strategy. Specifically, the federal government and some states have adopted policies to expand the apprenticeship model both to a range of industries and to a range of workers. In 2016, the U.S. Department of Labor awarded $10.4 mil-lion in State Accelerator Grants to fifty-two states, ter-ritories, and D.C to develop strategic plans for expand-ing and diversifying apprenticeship.53 They built on this investment with $50.5 million in State Expansion Grants to thirty-six states to continue developing comprehensive strategies for expanding apprenticeship. Ten southern states were awarded these state expansion grants, includ-ing Arkansas, Delaware Florida, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South Carolina, and Texas. Among many states, the federal grants are the primary means for expanding apprenticeship. However, some states have created their own complementary policies aimed at expanding apprenticeship for a broad range of residents, including adults and young adults who are not in school. Tax credits for employers who hire apprentices are the most prevalent policy among southern states, although some states also offer subsidies that cover the classroom instruction component of apprenticeship pro-grams54 and grants to fund apprenticeship programs in targeted industries.55 At least six southern states (Alabama, Arkansas, Louisiana, Maryland, South Carolina, and West Virginia) have cre-ated tax credits for employers who hire apprentices.56

These tax credits are supposed to provide an incentive

for employers, particularly those not familiar with the training practice, to sponsor registered apprenticeship programs by offsetting costs associated with program development and administration, instruction, and train-ing materials. While tax credits are a useful mechanism for starting a conversation with firms about apprenticeship, they may not be enough on their own to incent employers, par-ticularly those from small- and medium-sized firms who create most new jobs, to start an apprenticeship program. For one, firms do not realize the benefits of a tax credit until after they’ve paid the costs of registering a pro-gram and hosting apprentices, and not all firms have the capability to pay these costs upfront. Moreover, in many Southern states, business taxes are so low that such credits may have limited value. That’s why some states have taken additional measures to expand apprenticeship. For example, apprenticeship tax credits in South Carolina and Maryland are only one part of larger initiatives to expand apprenticeship. The South Carolina tax credit is part of Apprenticeship Carolina, administered by the state technical college system’s Division of Economic Development. Apprenticeship Carolina has a staff of consultants who serve as “inter-mediaries,” guiding companies through all steps of devel-oping and registering an apprenticeship program at no cost. Moreover, as part of the Economic Development Division, Apprenticeship Carolina consultants have access to employers and can broadly market apprentice-ship to them — especially those looking to locate to or expand in the state. South Carolina also subsidizes post-secondary instruction for apprentices so they don’t have to cover the costs of classroom instruction associated with their apprenticeship. Furthermore, Maryland recently passed legislation that in addition to establishing a tax credit, also provides a scholarship for classroom instruc-tion for apprentices.

KEY TAKEAWAYS:• Over the past few years, the majority of southern states have

taken advantage of federal policies and opportunities to expand sector partnerships and apprenticeship.

• Nine southern states have sector partnership policies, but only two southern states invest their own dollars to support local sector partnerships in multiple industries.

• Five southern states created tax credits to reward employers who hire apprentices, but these credits by themselves may not be enough to motivate small and mid-size businesses. To address the needs of these businesses, states could consider supporting intermediaries who can broker work-based learn-ing services, providing tuition assistance for apprentices, and broadly tie apprenticeship and other forms of work-based learning to overall economic development.

“Tax credits alone may not be enough to incent employers, particularly small and mid-size businesses, to create apprenticeship programs.

”


CASE STUDY: APPRENTICESHIP CAROLINA

Apprenticeship Carolina was launched in 2007 in response to South Carolina’s shortage of skilled workers. A 2003 report by the South Carolina Chamber of Commerce recommended that expanding apprenticeship would be an opportune way to solve this problem. The intent of Apprenticeship Carolina is to assist more industries and businesses in creating regis-

tered apprenticeship programs. At its inception in 2007, South Carolina had ninety apprenticeship programs and just under 800 active apprentices. Today, just over ten years later, the state boasts over 900 apprenticeship programs and close to 15,000 active apprentices. Apprenticeship Carolina is now housed under the state’s Technical College System and works with all sixteen of its colleges. This unparalleled growth serves an example of how states nationwide can use apprenticeship pro-grams to grow their skilled workforce and spur economic development.

Apprenticeship Carolina fulfills its objective of increasing the number of apprenticeships in South Carolina by educating companies on the benefits of having an apprenticeship pro-gram and helping them with registration and start-up pro-cess. Companies regularly approach Apprenticeship Carolina directly or through a referral from technical college, WIOA, or other economic development staff.

Although many companies recognize the benefits that apprenticeships provide, getting a registered apprenticeship up and running can be an intimidating endeavor. As an inter-mediary, Apprenticeship Carolina alleviates much of this burden by walking companies through the process step by step and taking on many of the administrative duties at no cost to the employer. In addition, companies can receive a $1,000 tax credit from the state for each registered appren-tice employed for at least seven months during each year of an apprentice’s program, for up to four years.

Apprenticeship Carolina immediately wanted to expand beyond the building trades. Though their support is avail-able to employers in any sector, Apprenticeship Carolina tar-gets employers in seven industry clusters that have shown demand for middle-skill workers: advanced manufacturing,

construction technologies, energy, healthcare, information technology, tourism and service indus-tries, and transportation, distribution, and logistics.

Apprenticeship Carolina is also a major part of the state’s economic development plan. This is because apprenticeship gives employers a pipeline of skilled workers to grow their businesses. A state that supports apprenticeship in a robust way is attractive to expanding businesses. The South Carolina Technical College System recognized this by establishing a Division of Economic Development to ensure the state’s competitiveness as it relates to workforce, education, and training. Through this division, the efforts of readySC, which specializes in recruiting businesses and getting them up and running in the state, and Apprenticeship Carolina are streamlined. Apprenticeship opportunities are included in any initial conversation with an employer looking to move or expand to South Carolina.

Apprenticeship Carolina’s original goal was 20,000 apprentices served by 2020. However, they’ve already surpassed that goal and are now working towards getting 2,000 companies in South Carolina to have registered apprenticeship programs. They also see room to grow and momentum around youth apprenticeship. The organization continues to serve as a model nationwide of the potential for growth in apprenticeship with strong state investment.


SOUTHERN STATES HAVE ROOM TO IMPROVE IN HELPING ADULTS SECURE POSTSECONDARY CREDENTIALSTo close the skills gap, state policymakers could consider developing strategies to train adults for middle-skill jobs. Working adults are increasingly turning to community colleges to earn credentials that can help them advance their careers. Indeed, half of all community college stu-dents are over twenty-one years old, and the vast majority of students are working while enrolled in school.57 At the same time, employers benefit when community colleges prepare local workers for skilled jobs. Community and technical colleges play a significant role in workforce training in the South, and in rural communities, may be the only postsecondary institution in close proximity.58 States could adopt policies to better support community colleges in this role and ensure that they prepare all stu-dents — including working learners and unemployed people looking to get back into the labor market — for middle-skill jobs. These include policies to promote job-driven financial aid and policies to support career pathways so that adults can upgrade their skills while balancing their training with work, family, and other responsibilities. By making sure that postsecondary training works for adults, states could begin to close their middle-skill gap now.

Job-driven financial aid policies allow students to get credentials that employers valueStates could help adults earn postsecondary credentials by making it more affordable for them to participate in training programs. On average, community college stu-dents have unmet financial need of $4,011 per year.59 To help meet this need, states could provide “job-driven” tuition-free assistance for middle-skill training programs generally (such as free community college) or specific high-demand industries in the region. Job-driven financial aid can also make attending school as a working learner easier by filling gaps in federal financial aid — providing aid to students attending less than half-time or to those enrolled in short-term training programs that take less than one year to complete. For example, it is difficult to use Pell grants, the U.S.’s top source of need-based, debt-free financial aid, for short-term programs — which can include industry-recognized credentials or certifications, licenses, and certificates — despite the fact that these credentials account for 24 percent of all post-secondary awards in the U.S.60. More than half of southern states have some sort of job-driven financial aid program in place, though some pro-grams are not funded to their full capacity.61 Southern states that do not have any significant job-driven financial aid include Alabama, Delaware, Louisiana, Mississippi, North Carolina, Oklahoma, and South Carolina.Of southern states that do have a policy in place, the amount of funding available and the scope of such

programs varies greatly. As the concept of free commu-nity college gains popularity, more and more states are developing “Promise” programs that provide last-dol-lar scholarships — scholarships designed to cover the gap between students’ other financial aid and their total financial need — to residents attending community and technical colleges. However, most states have not made these programs available to adults. Out of the southern states, only Tennessee provides free community college to all of its residents, regardless of age. Georgia and Virginia have established programs to help residents earn credentials sought by employers in leading industries. However, they are not funded to capacity and could be expanded.Georgia’s Helping Outstanding Pupils Educationally (HOPE) Grant provides tuition assistance to residents of any age who are pursuing a technical college certificate or diploma, with additional funding available to those pursuing a certificate or diploma in one of seventeen in-demand fields, including precision manufacturing, health science, and welding technology. However, due to a decrease in funding, the HOPE Grant only covers a percentage of tuition and does not cover books, supplies, and other essential costs.62

Virginia’s newly-established New Economy Workforce Grant Program, provides first-come, first-served grant funding for noncredit workforce training that leads to a credential in a high-demand field. Students can have up to two thirds of the program cost covered through this grant established in 2016. Awards totaling $5 mil-lion were given during its first year, providing grants to roughly half of the state’s 4,200 credential earners.63

Given student demand, Virginia has now expanded the program to $7.5 million in awards per year. While these policies in Virginia and Georgia are promising examples, more needs to be done across the region to adopt and adequately fund financial aid programs that help people earn credentials for middle-skill jobs.

Career pathways policies help students address barriers to build in-demand skillsFor adults who are trying to pursue a postsecondary cre-dential while holding down a job or raising a family — all on a tight budget — coursework isn’t the only challenge. Additional barriers — scheduling difficulties, balancing immediate work opportunities with longer-term edu-cation and employment goals, and financial challenges, such as transportation, housing, and child care costs — can prevent success. Additionally, some adults need to improve their literacy and numeracy skills in order to succeed in postsecond-ary training. Limited opportunities to build these basic skills can be a barrier for adults seeking to secure college credentials.

“Half of all community college students are over twenty-one years old and the vast majority of students are working while enrolled in school.

”


CASE STUDY: TENNESSEE RECONNECT

Governor Bill Haslam of Tennessee signed the Tennessee Reconnect Act (HB 531/SB 1218) into law in May 2017, making community college effectively free to all Tennesseans, regardless of

age. Funded by the state lottery, Tennessee Reconnect is a last-dollar scholarship for adults to attend community col-lege to gain a credential or degree. The tuition grant is set to begin disbursement in the Fall of 2018. While the schol-arship is critical, Tennessee Reconnect’s strong statewide recruitment and enrollment effort is also instrumental to positioning the program for success.

The impetus for Tennessee Reconnect was born out of Governor Haslam’s Drive to 55: an initiative to increase the number of Tennesseans with a postsecondary degree or credential to 55 percent by the year 2025 in order to keep up with job demand. Governor Haslam started Drive to 55 after an analysis showed that without intervention, only 39 percent of Tennesseans would have a postsecondary credential by 2025.

After reviewing the numbers, officials realized that the Drive to 55 goal could not be attained without a signifi-cant number of Tennessee adults returning to college to gain a postsecondary credential. In addition to adults who may never have started college, data revealed that there are actually 900,000 Tennesseans who have completed some college but did not graduate with a credential or degree. Providing free postsecondary education for these adults not only helps more Tennesseans move into bet-ter paying jobs, but also helps employers fill critical skills gaps and grow their businesses. Reflecting the skills gap trend nationwide, middle-skill jobs account for 58 per-cent of Tennessee’s labor market, but only 45 percent of the state’s workers are trained to the middle-skill level. Tennessee Reconnect aims to help close that gap.

The Tennessee Reconnect program has set itself up for success with distinct marketing and outreach strategies coming from the state, institutions, and regions. The Tennessee Higher Education Commission (THEC) engages in traditional marketing through advertisements and a user-friendly website. It also runs the Tennessee Reconnect Ambassador program, where people are trained to iden-tify potential Reconnect students, answer basic questions about the program, and connect potential applicants to the right resources depending on their needs. For exam-ple, in Middle Tennessee, Urban League staff are trained as Reconnect Ambassadors, ensuring that people receiv-ing other community services through the organization also have the opportunity to learn about Reconnect. The

postsecondary institutions themselves offer information sessions as well as pre-enrollment boot camps focused on topics such as math, technology, or writing.

Regional outreach is also conducted through Tennessee Reconnect Communities, which offer community-based, institution-neutral, high-touch advising, navigation, and support services that often cover a multi-county region. Regions interested in offering this service apply to THEC, which gives start-up grants to hire a director and other staff. Reconnect Communities are led by an organization that is trusted and respected within that community. For example, in Nashville this is the Nashville Chamber of Commerce, but in other regions it may be a communi-ty-based organization or a job center. These Reconnect Communities do one-on-one outreach and meetings to work with potential students to develop a plan of action for them to return to school, graduate, and find a good job. Directors go out into the community — to malls, churches, and more — to find potential students. Eight Reconnect Communities have been launched thus far, and they are already serving 13,000 students without the tuition grant even being available yet.

Tennessee Reconnect also works with state agencies and counties to make sure they are using and promot-ing the program to its full advantage. The Tennessee Department of Transportation has trained several employ-ees as Ambassadors and is poised to take advantage of this opportunity to upskill their workers. THEC plans to replicate this model with other state agencies so that they can educate their employees and their clients about Tennessee Reconnect.

Additionally, THEC has trained thirty staff at twenty compa-nies in Rutherford County as Reconnect Ambassadors, with an additional thirty to be trained in 2018. The Rutherford County Chamber requested this training from THEC as they realized how important Tennessee Reconnect could be to business growth and development, as well as to reaching the county’s Drive to 55 goal. Several other counties have seen Rutherford’s example and have reached out to try to find out how they can replicate this themselves.

The tuition grant will begin disbursement in Fall 2018. Looking forward, Governor Haslam has pledged to focus on completion and equity to make sure that working learn-ers of all demographics are not only starting college but completing and exiting with an industry-recognized cre-dential or degree.


Some states have introduced career pathways to help mitigate the many challenges associated with securing a college credential. These pathways address challenges in several ways: • Use career coaches who connect people with the right

training programs and support services to achieve their career goals, whether those services are provided by the college itself or a partner such as a community-based organization.

• Expedite training by helping people brush up on their basic reading, writing, and math skills (or earn their high school equivalency diploma) at the same time as they’re building technical skills.

• Provide in-demand “stackable” credentials that count toward a higher-level certificate or degree and offer credit for prior learning. This means that workers can use their short-term credentials not just to find an in-demand job, but also to continue their education without losing credit for the work they’ve already done.

Because career pathways are built to help workers earn in-demand, industry-recognized credentials, they create a pool of people with the skills and training that local busi-nesses need. In fact, the best pathways use sector partner-ships to engage industry leaders in program design and make hiring connections for students. While career pathways are recognized as a best practice, community colleges may face challenges in adopting them because they require intensive partnerships with state agencies and community partners, as well as additional financial investment. States could support and scale the adoption of these pathways by providing support directly to community colleges and their community partners, and by taking advantage of opportunities to braid federal and state dollars across workforce, higher education, and human services programs. In fact, such policies are crit-ical in states that are aiming to prepare low-skilled and low-income adults for family-supporting careers.Few southern states have adopted policies to promote robust postsecondary career pathways. Only four south-ern states (Arkansas, North Carolina, Texas, and Virginia) have policies that explicitly support and invest in these types of pathways despite the South’s relatively high pov-erty and low educational attainment rates.64 Some southern states have developed critical components of training pathways using private philanthropic dollars and grants from more general state sources. However, the lack of a dedicated state investment for these initiatives threatens their long-term viability. For example, the Mississippi Community College Board implemented the Mississippi Basic Integrated Education and Training Program at each of its fifteen community colleges mainly with philanthropic dollars.65 This “inte-grated education and training program” is modeled after one in Washington State with proven success.66 Students

have different onramps to the training pathway, including a SmartStart class which consists of a career assessment, basic education, career awareness, and soft skills training for up to three hours of college credit. The Mississippi Integrated Basic Education and Skills Training program helps people improve their basic read-ing, writing, and math skills while training for an occu-pation so they can earn their high school equivalency diploma and an industry-recognized credential at the same time. However, because there are not dedicated state resources for the program, the future of the Mississippi program is uncertain. Similarly, Georgia, Kentucky, North Carolina, and Louisiana were among five states to participate in Accelerating Opportunity — a philanthropically funded initiative to promote integrated education and train-ing approaches at the state level. An impact analysis of Accelerating Opportunity found that students earned more credentials while taking fewer credits, accelerating their postsecondary education goals, and in some states, program participants saw labor market gains.67 With grant resources expired, however, and no substantial state funding, Georgia, Kentucky, and Louisiana may face challenges to institutionalizing these programs.

KEY TAKEAWAYS:• Most states in the South have job-driven financial aid

programs, though the funding and the scope of each state’s program varies widely.

• Only four southern states use policy and resources to pro-mote postsecondary career pathways. Though pathways have produced results, most southern states have not invested the funding necessary to secure the future of these programs.

• Southern states could consider ensuring that job-driven finan-cial aid is available to more adult students.


CASE STUDY: ARKANSAS CAREER PATHWAYS

The Arkansas Career Pathways Initiative (CPI) was formed in 2005 in response to Arkansas’ relatively high poverty rates and low number of residents with postsecondary credentials. CPI provides tui-

tion and case management support for low-income parents to earn GEDs, certificates, and associate degrees in commu-nity colleges and technical centers across Arkansas. Since its inception, over 30,000 students have enrolled in one of more than 400 career pathway options that link education, training, and support services and lead to employment and career advancement in high-demand industries.

With initial support from the Governor’s Workforce Cabinet, the Arkansas Department of Higher Education (ADHE) worked with twenty-five two-year colleges and techni-cal centers to set up and administer CPI programs. The state funds the program with existing federal Temporary Assistance for Needy Families (TANF) block grant dollars, administered by the Arkansas Department of Workforce Services (DWS). Eligible candidates are required to be cus-todial parents or guardians of children living at home. In addition, they must be current or past recipients of TANF cash assistance; or be current recipients of Supplemental Nutritional Assistance Program (SNAP), Medicaid, or Arkansas’ children’s health insurance program; or earn 250 percent or less of the federal poverty level. To date, close to 90 percent of CPI participants are women and the majority are single parents. Recipients receive funding each year for tuition and fees (beyond what is covered by Pell Grants), as well as wraparound support services such as career plan-ning and employment counseling, and assistance for child-care, transportation, and coursework materials.

According to an external College Count$ impact study funded by the Winthrop Rockefeller, Ford, and Annie E. Casey Foundations, around half of CPI participants between 2006 and 2013 received at least one postsecondary certificate or degree compared to just a quarter of all Arkansas commu-nity college students. CPI students of color were three times as likely to attain an academic credential, compared to their non-CPI counterparts. In 2011, CPI students earned roughly $3,000 more in their first twelve months with a job versus non-CPI TANF recipients. The impact study also evaluated the initiative’s return on investment measured by increases in tax payments from wage gains and decreases in public assistance spending. The state of Arkansas receives a sig-nificant return of $1.79 over five years for every dollar spent on the Career Pathways Initiative.

Not only does CPI help Arkansans break the cycle of poverty and save the state money, it also reduces the skills gap by connecting participants with jobs in high-demand career sectors. Each year, CPI college and technical center sites conduct a gap analysis using DWS data about job open-ings, job growth, and job loss across industries. Site lead-ers also speak with employers around the state about labor demands. CPI advisors use this labor market and anecdotal data to help students align their career goals with actual workforce needs. The Allied Health and Education sector for instance, which includes nursing occupations, is one of the highest-demand industries and employs almost two-thirds of CPI certificate or degree recipients.

The Arkansas Career Pathways Initiative has successfully leveraged existing funding to produce substantial academic and employment outcomes that benefit both low-income families and employers. Ongoing coordination across state agencies and the twenty-five participating colleges and tech-nical centers drives the initiative’s success. The ADHE maps out career pathways based on current employer demand and provides staff to assist with program implementation. Data sharing between ADHE and DWS allows for continuous program evaluation and improvement. This collaboration is driven in part by the state legislature’s ongoing bi-parti-san support and its policy that CPI maintain data on course enrollment, degree completion, job placement and retention, and wages. Tuition assistance and case management are also essential components of the initiative, a point emphasized in follow up interviews with CPI participants.

There is much work left to be done, given that Arkansas’ 19 percent poverty rate remains higher than the nation’s aver-age. While there are more state residents age twenty-five or older with a postsecondary degree than when the pro-gram started, numbers still fall short of the national rate. Unfortunately, decreased funding for CPI in recent years has narrowed the impact of the program. In addition, fed-eral TANF work participation requirements create a disin-centive for investing TANF dollars in education and training initiatives such as CPI. Limitations on Pell Grant eligibility also provide challenges for CPI students enrolled part-time and/or in short-term programs. Looking to the future, state and federal policies must be aligned with the goals of CPI so the initiative can be as effective as possible in provid-ing economic opportunities for low-income families across Arkansas.


SOUTHERN STATES CAN STRENGTHEN WORKFORCE DATA SYSTEMS TO PROMOTE ACCOUNTABILITY AND TRANSPARENCYResources invested in sector partnerships, work-based learning, job-driven financial aid, and career pathways should go to programs that successfully serve people from all backgrounds and places, including women, people of color, and residents from both metropolitan and rural communities. States need accurate and comprehensive data systems to help leaders gauge their progress toward this goal. Data could be used to identify gaps in program access or performance and direct practitioners and poli-cymakers to solutions for closing those gaps. Businesses need access to data that will help them assess whether the regional workforce can meet its current and future needs. Data systems are crucial to determining where skills gaps exist in certain industries and where sector partnership efforts should be channeled. Systems can show both in-state demand for selected occupations and the number of students enrolled in programs that prepare people for those occupations. Only three southern states — Florida, Mississippi, and South Carolina — report that their sys-tems can conduct skills gap analyses. Most states report that they are in the process of building this functionality.68

Data systems for higher education and workforce programs should be able to inform students, workers, employers, policymakers, and others about whether peo-ple are accessing and completing programs and finding jobs. Most southern states have data systems capable of providing this information. However, systems in three southern states — Alabama, Delaware, and South Carolina — are not fully capable of helping these differ-ent stakeholders make informed career decisions.69 Southern states could also use data to produce publicly available consumer information tools for students and workers so that they can compare programs and make informed education and career decisions. Data should be aggregated to protect privacy. About half of south-ern states produce these tools. Of the states that do not have these information tools, most are in the process of producing them. However, Delaware, Maryland, and Oklahoma have made minimal progress toward produc-ing these tools.70 In addition to making data available to students and workers, southern states could also regularly report the education and employment outcomes for the state’s edu-cation and workforce programs to the state legislature. This prompts policymakers to evaluate the effectiveness of the state’s programs. Only five southern states regu-larly report these outcomes to policymakers. Those states are Louisiana, Mississippi, Oklahoma, Tennessee, and Texas.71 Finally, states could invest their own resources to supple-ment the federal resources available to develop and main-tain data reporting systems. Fourteen states across the

nation find it necessary to supplement federal resources for data systems with state resources. Only four southern states use their own money to help create and maintain these important data systems. These states are Georgia, Mississippi, North Carolina, and Tennessee.72 Even states that invest their own funding in systems are primarily dependent on federal grants. Once federal grants expire, many states are forced to downsize systems which stalls the progress they’ve made and jeopardizes the realization of potential benefits.

KEY TAKEAWAYS:

• Data systems help perform crucial functions that promote accountability, informing students, workers, employers, policy-makers, and others about where industry skills gaps exist and whether people are accessing and completing programs and finding jobs.

• Most southern states have data systems capable of providing information about their states’ education and training pro-grams. While only a few southern states’ systems can deter-mine where skills gaps exist, most states are in the process of building this functionality.

• The majority of southern states have or are in the process of developing consumer information tools for students and work-ers to make informed career decisions. Yet three southern states have made minimal progress toward producing these tools.


A ROADMAP FOR SOUTHERN SKILL BUILDING


A ROADMAP FOR STATE POLICYMAKERS TO CLOSE THE SKILLS GAP AND GROW THE ECONOMYThis report is filled with examples of how states could close their skills gaps and strengthen their economies. This roadmap describes actions policymakers could take to either begin or continue their work toward building a stronger economy. State policymakers could:

1. Use workforce development strategies, such as sector partnerships and work-based learning, as economic development tools capable of meeting industry needs.The availability of skilled workers factors heavily into businesses’ ability to grow, as well as their decisions to relocate to a new place and stay there. Policymakers interested in expanding their states’ business base by targeting high-growth industries could offer indus-try-driven training through sector partnerships and work-based learning. These workforce development policies could be coordinated with other sectoral eco-nomic development policies that support research and development, technology transfer, industrial process upgrading assistance, entrepreneurship, and traditional incentives. Examples from North Carolina and South Carolina demonstrate the value of this approach. In North Carolina, sector-specific training for the biotech indus-try dramatically influenced firms’ decisions to move to or stay in the state. In South Carolina, the state’s appren-ticeship program is integral to economic development efforts, ensuring that existing and new companies have the workforce development support they need to train a skilled workforce. By using industry-driven training as a key economic development tool, states can maximize their job creation efforts. States could use this strategy to promote industry-specific economic development in both rural and metropolitan regions. Aligning economic and workforce development efforts is critical in rural communities that need more jobs and more skilled workers to stabilize and grow their local economies. In metropolitan areas, strategies that promote industry-driven training as a key economic development tool can help ensure that job growth is inclusive and pro-vides opportunities for all residents.

2. Invest in communities to implement high-quality workforce development strategies at the local level. Over the past several years, a number of Southern states have adopted key skills policies to support local sector partnerships, work-based learning, and career pathways for adults. However, most states are at the initial stage of this work, using federal or philanthropic funds to test new strategies. States could do more to bring this suite

of proven skills strategies to scale in communities across the state. Policymakers could consider investing more state resources into the development and growth of local workforce devel-opment strategies. By dedicating state dollars to local strategies, states could make better use of the infrastructure they’ve started to build with federal funds. State dollars could also leverage investments from other sources, such as philanthropy and business. In fact, state investments in sec-tor partnerships, work-based learning, and career pathways could complement the training investments that employers and workers are already making. States who invest their own dollars into these strategies could also set requirements around service delivery and program performance so that local practice is tied to state policy goals. Maryland and Tennessee offer examples of states that have invested their own funds in building sec-tor partnerships, giving them more capacity to implement these partnerships.While funding is critical, local communities need addi-tional investment beyond dollars to successfully adopt new workforce development strategies. States could couple technical assistance with funding to help with initial implementation, disseminate best practices and lessons learned, and help local communities develop the tools necessary to coordinate strategies across employers, education and training providers, and other stakehold-ers. Technical assistance may be particularly important in parts of the state that have a less robust workforce development system. Through its High Demand Career Initiative, Georgia is working to provide technical assis-tance to regional sector partnerships.

3. Establish job-driven financial aid programs that are available to a wide range of students. Over half of the states in the South have established job-driven financial aid policies in recognition of the fact that many students need assistance to earn postsec-ondary credentials. Yet, in states that do have policies in place, programs leave significant funding gaps for stu-dents. For example, financial aid policies may not pay for full tuition, cover costly fees, or apply to short-term training. To ensure that students can acquire the skills and certifications needed by employers, states could offer financial assistance for a wide variety of programs and needs.Tennessee offers a strong example of job-driven finan-cial aid. Through the Tennessee Reconnect grant set to begin disbursement in Fall 2018, attaining a degree or credential from a community college is effectively free to all Tennesseans regardless of age. Local chambers of commerce across the state see Tennessee Reconnect as an important tool for business growth and development.


4. Form middle-skill career pathways and include comprehensive supportive services that enable completion.Since upskilling the existing adult workforce is essential to closing state skills gaps, policymakers could introduce career pathways that help mitigate the many challenges adults face in securing college credentials. These pathways use career coaches who connect people with the right training and support services, expedite training, and pro-vide in-demand “stackable” credentials. The Arkansas Career Pathways Initiative is a strong model of such a program. Arkansas assesses gaps in the state’s key industries and uses federal money to provide gap tuition funding and wraparound support services for adults so that they can complete their college credentials. An independent study of the program has already con-firmed that it produces a positive return on investment for the state, and the initiative’s graduates are helping to fill needs in the state’s high-demand industries.

Support services like child care and transportation are a key feature of these training pathways for adult students as they enable them to complete college credentials while working, raising a family, or both. They are especially important in the South with its burdensome transpor-tation costs and disproportionately high share of single parents. Southern states could follow Arkansas’ lead and use existing federal fund sources to provide career path-ways along with strong supportive services and also con-sider refraining from adding restrictions on supportive services that would interfere with access to education and training.

5. Create state data systems that provide accountability on how training programs are helping residents with diverse needs get skilled jobs. When policymakers invest taxpayer dollars into work-force development programs, they want to ensure results for workers and employers. Since policymakers looking


to close their state’s skills gap must develop a diverse and inclusive workforce, it is imperative that training pro-grams are widely available to all residents, including those who face systemic barriers to economic opportunity. To address these issues, states could collect data and create data tools that show participation, completion, and labor market outcomes for the full range of state education and workforce programs, as well as for different racial, gender, and income groups. These data tools could be accessible to both policymakers and the public so that students, work-ers, employers, and others can make informed decisions. Mississippi illustrates how a southern state can invest in data systems. Mississippi’s data system can conduct skills gap analyses and produce information on whether people are accessing and completing workforce programs. However, all southern states could make better use of these data systems to inform students, workers, employ-ers, and policymakers about how workforce programs are preparing jobseekers with different training needs and addressing equity gaps. Once data systems are used to identify gaps in program access or performance, this data could also be used to close these gaps and for overall pro-gram improvement.

VEHICLES FOR STATE POLICYMAKERS TO CLOSE THE SKILLS GAP INCLUDE GOAL-SETTING AND A “SKILLS CABINET” State policymakers could also ease their path to imple-mentation of these steps by taking the actions below. These actions could bring a broad set of stakeholders to the table to unite around a common vision for skills development:

Set a bold goal for increasing the number of adults trained for skilled jobs. A common goal could mobilize the public and private sectors to work together to adopt practical solutions for closing the skills gap. For example, in 2013, Tennessee’s Governor Haslam adopted a goal for 55 percent of Tennesseans to earn a college degree or certificate by the year 2025. This “Drive to 55” goal created a framework for key state policies including Tennessee Reconnect,

which specifically targets adults. By adopting a statewide postsecondary attainment goal for adults that includes high-quality workforce credentials and degrees, state pol-icymakers could show businesses and residents that they are committed to meeting their skill needs.

Create a cross-agency “Skills Cabinet” and task agency leaders with implementing a strategy for meeting the state’s postsecondary attainment goal for adults. Closing the skills gap isn’t a job for a single government agency. Instead, it requires coordination across a range of agencies to make sure that workers have the right com-bination of training, education, and support services to build skills for good jobs. State policymakers could con-sider creating a Skills Cabinet so that agency leaders across workforce development, economic development, higher education, and human services can develop and implement a comprehensive and shared skills strategy. States like Arkansas, Alabama, Kentucky, and North Carolina have all created multi-agency leadership groups to guide skills policies.73 The strength and efficacy of a skills cabinet depends on the actions it takes. So while the creation of the cabinet is a critical first step, activities must go beyond naming and convening a set of agency leaders. To be effective, skills cabinets could: • Align different agencies’ strategic plans in service of

their common goal.• Braid federal and state funding streams to support key

strategies and maximize impact. • Use data systems to measure progress toward goals and

ensure that such progress is equitable and inclusive.• Identify opportunities for aligning education and

training programs with other critical policies around issues like childcare, transportation, and criminal jus-tice that are key for removing barriers to work.

• Make joint recommendations to policymakers on new and innovative strategies that agencies can implement in partnership with one another to improve opportuni-ties for workers and businesses.


1 The authors use the definition of the “South” or the south-ern states established by the U.S. Census, which includes the states of Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia, Alabama, Kentucky, Mississippi, Tennessee, Arkansas, Louisiana, Oklahoma, Texas, and the District of Columbia. Definition of “Region,” Glossary, U.S. Census.

2 “United States’ Forgotten Middle,” National Skills Coalition, 2017. Available at https://www.national-skillscoalition.org/resources/publications/2017-mid-dle-skills-fact-sheets/file/United-States-MiddleSkills.pdf.

3 John Steele Gordon, An Empire of Wealth, HarperCollins Publishers, 2004.

4 James C. Cobb, The Selling of the South, University of Illinois Press, 1993.

5 Anthony Carnevale and Nicole Smith, “A Decade Behind: Breaking Out of the Low-Skill Trap in the Southern Economy,” Center for Education and the Workforce, Georgetown University, July 2012.

6 Enrico Moretti, The New Geography of Jobs, Mariner Books, 2013.

7 Mike Maciag, “Where Wages are Lowest and Highest in America,” Governing, March 13, 2015. Available at http://www.governing.com/topics/mgmt/gov-metros-where-wag-es-are-lowest.html.

8 Richard J. Murnane and Frank Levy, Teaching the New Basic Skills. Principles for Educating Children To Thrive in a Changing Economy, 1996.

9 Harry J. Holzer, “Job Market Polarization and U.S. Worker Skills: A Tale of Two Middles,” Brookings, April 2015. Available at https://www.brookings.edu/research/job-mar-ket-polarization-and-u-s-worker-skills-a-tale-of-two-mid-dles/.

10 Education requirements also differ among employers and may shift over time. For instance, an increasing share of job openings for registered nurses require a bachelor’s degree and are no longer considered middle-skill opportunity occupations. Keith Wardrip, Stuart Andreason, and Mels de Zeeuw, 2017. “Uneven Opportunity: Exploring Employers’ Educational Preferences for Middle-Skill Jobs.” Federal Reserve Banks of Philadelphia and Atlanta.

11 Richard M. McGahey and Jennifer S. Vey, Retooling for Growth: Building a 21st Century Economy in America’s Older Industrial Areas (Brookings Institution Press, 2008); Alan Mallach, Rebuilding America’s Legacy Cities: New Directions for the Industrial Heartland (CreateSpace, 2012); Edward W. Hill et al., “Forces Affecting City Population Growth or Decline: The Effects of Interregional and Inter-Municipal Competition,” in Rebuilding America’s Legacy Cities: New Directions for the Industrial Heartland, ed. Alan Mallach (New York: The American Assembly, 2012), 31–80.

12 Jennifer S. Vey, “Restoring Prosperity: The State Role in Revitalizing America’s Older Industrial Cities,” Brookings, May 2007. Available at https://www.brookings.edu/research/restoring-prosperity-the-state-role-in-revitaliz-ing-americas-older-industrial-cities/.

13 Vey, 2007.

14 Kenneth M. Johnson, “Rural Demographic Change in the New Century: Slower Growth, Increased Diversity,” Carsey Institute, Winter 2012. Available at https://scholars.unh.edu/cgi/viewcontent.cgi?article=1158&context=carsey.

15 Michael Mazerov and Michael Leachman. “State Job Creation Strategies Often Off Base,” Center on Budget and Policy Priorities, February 2016. The researchers find that most jobs are created by businesses that start up or are already present in a state.

16 NSC analysis of Bureau of Labor Statistics Occupational Employment Statistics by State, May 2015, and U.S. Census Bureau American Community Survey, 2011-2015 averages.

17 “Youth not attending school and not working by age group” Kids Count Data Center, A Project of the Annie E. Casey Foundation, 2016 Data. Available at http://datacenter.kidscount.org/characteristics. The District of Columbia is considered a state for purposes of this ranking.

18 Quillian, Lincoln, Devah Pager, Ole Hexel, and Arnfinn H. Midtbøen (2017). “Meta-Analysis of Field Experiments Shows No Change in Racial Discrimination in Hiring over Time.” National Academy of Sciences 114 (41): 10870–10875.

19 Fryer, Roland G., Devah Pager, and Jӧrg L. Spenkuch (2015). “Racial Disparities in Job Finding and Offered Wages.” The Journal of Law and Economics 56(3).

20 Pager, Devah, Bruce Western, and Bart Bonikowski (2009). “Discrimination in a Low-Wage Labor Market: A Field Experiment.” American Sociological Review 74: 777–779.

21 Martha Ross and Nicole Svaijlenka, “Employment and disconnection among teens and young adults: The role of race, place, and education,” Brookings Institution, May 2016. Available at https://www.brookings.edu/research/employment-and-disconnection-among-teens-and-young-adults-the-role-of-place-race-and-education/.

22 Bureau of Labor Statistics. Local Area Unemployment Statistics Metropolitan Area Employment and Unemployment Summary and Tables February 2018. April 4, 2018.

23 OECD, “Time for U.S. to Reskill? What the Survey of Adult Skills Says,” OECD Skills Studies, OECD Publishing, 2013.

24 Since the Great Recession, the U.S. has experienced a decline in the labor force participation rate, which measure the percentage of the people age sixteen or older who are employed or looking for work.

ENDNOTES

https://www.census.gov/glossary/#term_Region

https://www.nationalskillscoalition.org/resources/publications/2017-middle-skills-fact-sheets/file/United-States-MiddleSkills.pdf



http://www.governing.com/topics/mgmt/gov-metros-where-wages-are-lowest.html



https://www.brookings.edu/research/job-market-polarization-and-u-s-worker-skills-a-tale-of-two-middles/.



https://www.brookings.edu/research/restoring-prosperity-the-state-role-in-revitalizing-americas-older-industrial-cities/.



https://scholars.unh.edu/cgi/viewcontent.cgi?article=1158&context=carsey

https://scholars.unh.edu/cgi/viewcontent.cgi?article=1158&context=carsey

http://datacenter.kidscount.org/characteristics

http://datacenter.kidscount.org/characteristics

https://www.brookings.edu/research/employment-and-disconnection-among-teens-and-young-adults-the-role-of-place-race-and-education/.




25 The November 2008 civilian labor force participation rate was 65.9 percent and the November 2017 rate 62.7 percent. Current Population Survey, U.S. Bureau of Labor Statistics.

26 Table S1701, South Region, American FactFinder, U.S. Census.

27 Lower-income households have incomes at or below 80 percent of the area median income. Researchers suggest that households have affordable housing and transportation when they spend no more than 45 percent of their incomes on these combined cost areas. Center for Neighborhood Technology’s Housing and Transportation Affordability Index.

28 “Parents and the High Costs of Child Care,” Child Care Aware of America, 2017. Available at https://usa.child-careaware.org/wp-content/uploads/2017/12/2017_CCA_High_Cost_Report_FINAL.pdf.

29 Stephen F. Hipple, “People who are not in the labor force: why aren’t they working?” Beyond the Numbers, U.S. Department of Labor Bureau of Labor Statistics. Available at https://www.bls.gov/opub/btn/volume-4/people-who-are-not-in-the-labor-force-why-arent-they-working.htm.

30 Barbara Gault, Elizabeth Noll, and Lindsey Reichlin, “The Family-Friendly Campus Imperative: Supporting Success Among Community College Students with Children,” Association of Community College Trustees Invitational Symposium, 2016. Available at https://iwpr.org/wp-con-tent/uploads/2017/03/ACCT_Paper-3-8-17-final.pdf.

31 E. Ann Carson and Elizabeth Anderson, Bureau of Justice Statistics, National Prisoner Statistics, 2015. “Table 4: Sentenced prisoners under the jurisdiction of state or fed-eral correctional authorities, by sex, December 31, 2014 and 2015.”

32 These four states are Kentucky, Louisiana, Mississippi, and West Virginia.

33 “Closing the Digital Divide: A Framework for Meeting CRA Obligations,” Federal Reserve Bank of Dallas, July 2016. Available at https://www.dallasfed.org/cd/pubs/dig-italdivide.aspx; Peter Stenberg, Mitch Moreheart and John Cromartie, “Broadband Internet Service Helping Create a Rural Digital Economy,” Amber Waves, U.S. Department of Agriculture. Available at https://www.ers.usda.gov/amber-waves/2009/september/broadband-internet-service-help-ing-create-a-rural-digital-economy.

34 “Philanthropy as the South’s Passing Gear: Fulfilling the Promise,” Southeastern Council of Foundations, MDC, 2017. Available at http://stateofthesouth.org/wp-content/uploads/2017/11/MDC_SECF-SOS_2017.pdf.

35 Carnevale and Smith, 2012.

36 Rasheed Malik and Katie Hamm, “Mapping America’s Child Care Deserts,” Center for American Progress, August 30, 2017. Available at https://www.americanprogress.org/issues/early-childhood/reports/2017/08/30/437988/mapping-americas-child-care-deserts/.

37 U.S. Census Bureau American Community Survey.

38 People of color will make up the majority of the population in most Southern states by 2060. National Equity Atlas, Policy Link and “States of Change,” American Enterprise Institute, Brookings Institution, Center for American Progress, February 2015.

39 William H. Frey, “The New Great Migration: Black Americans’ Return to the South, 1965-2000,” Brookings, 2004.

40 Rakesh Kochhar, Roberto Suro, and Sonya Tafoya, “The New Latino South: The Context and Consequences of Rapid Population Growth,” Pew Hispanic Center, July 26, 2005. Available at http://www.pewhispanic.org/2005/07/26/the-new-latino-south/; Jake Grovum, “How Asian-American are Changing the South,” October 2014. Available at http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2014/10/03/how-asian-americans-are-changing-the-south.

41 The net value of assets minus liabilities.

42 Su Jin Jez, “The Influence of Wealth and Race in College Attendance,” University of California, Berkeley, November 2008. Available at https://cshe.berkeley.edu/publications/influence-wealth-and-race-four-year-college-attendance; Dalton Conley, Being Black, Living in the Red: Race, Wealth, and Social Policy in America, University of California Press, 2010.

43 Cajner, Tomaz, Tyler Radler, David Ratner, and Ivan Vidangos (2017). “Racial Gaps in Labor Market Outcomes in the Last Four Decades and over the Business Cycle.” Finance and Economics Discussion Series 2017-071. Washington, DC: Board of Governors of the Federal Reserve System.

44 See footnotes 19, 20, and 21.

45 Based on National Skills Coalition’s 50-state scans of skills policies.

46 Richard Hendra et al. https://www.mdrc.org/publication/encouraging-evidence-sector-focused-advancement-strat-egy.

47 For more on North Carolina Biotechnology Center, see https://www.ncbiotech.org/.

48 NSC defines a state sector partnership policy as a state-level policy that authorizes ongoing state support for local sector partnerships through funding, technical assistance, and/or program initiative(s). Not counted as a state policy are investments made through one-time federal grants intended to support sector partnerships, sector strate-gies that do not include ongoing support for local sector partnerships, or sector partnership language in WIOA state plans if there is no other evidence of a program initiative and implementation of state support. See Bryan Wilson, “Sector Partnership Policy: 50-State Scan,” National Skills Coalition, September 2017.

49 Information on funding for sector partnerships from Wilson, 2017. Additionally, North Carolina funds sector partnerships through using federal funds to provide Maximize Carolina Sector Grants.

https://usa.childcareaware.org/wp-content/uploads/2017/12/2017_CCA_High_Cost_Report_FINAL.pdf



https://www.bls.gov/opub/btn/volume-4/people-who-are-not-in-the-labor-force-why-arent-they-working.htm

https://www.bls.gov/opub/btn/volume-4/people-who-are-not-in-the-labor-force-why-arent-they-working.htm

https://iwpr.org/wp-content/uploads/2017/03/ACCT_Paper-3-8-17-final.pdf.

https://iwpr.org/wp-content/uploads/2017/03/ACCT_Paper-3-8-17-final.pdf.

https://www.dallasfed.org/cd/pubs/digitaldivide.aspx

https://www.dallasfed.org/cd/pubs/digitaldivide.aspx

https://www.ers.usda.gov/amber-waves/2009/september/broadband-internet-service-helping-create-a-rural-digital-economy



http://stateofthesouth.org/wp-content/uploads/2017/11/MDC_SECF-SOS_2017.pdf

http://stateofthesouth.org/wp-content/uploads/2017/11/MDC_SECF-SOS_2017.pdf

https://www.americanprogress.org/issues/early-childhood/reports/2017/08/30/437988/mapping-americas-child-care-deserts/



http://www.pewhispanic.org/2005/07/26/the-new-latino-south/;

http://www.pewhispanic.org/2005/07/26/the-new-latino-south/;

http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2014/10/03/how-asian-americans-are-changing-the-south



https://cshe.berkeley.edu/publications/influence-wealth-and-race-four-year-college-attendance



https://www.mdrc.org/publication/encouraging-evidence-sector-focused-advancement-strategy



https://www.ncbiotech.org/


50 Intuitions Confirmed. The Bottom-Line Return on School-to-Work Investment for Students and Employers (1999) Available at files.eric.ed.gov/fulltext/ED430083.pdf.

51 Robert Lerman, Lauren Eyster, and Kate Chambers, The Benefits and Challenges of Registered Apprenticeship: the Sponsors’ Perspective (2009). Available at http://www.urban.org/sites/default/files/alfresco/publica-tion-pdfs/411907-The-Benefits-and-Challenges-of-Re-gistered-Apprenticeship-The-Sponsors-Perspective.PDF.

52 ApprenticeshipUSA Toolkit, U.S. Department of Labor. Available at https://www.dol.gov/apprenticeship/toolkit/toolkitfaq.htm.

53 U.S. Department of Labor Apprenticeship USA Investments available at https://www.dol.gov/featured/apprenticeship/grants.

54 Both Florida and Texas subsidize postsecondary instruction for apprentices. Bryan Wilson and Sapna Mehta. “Work-Based Learning Policy 50-State Scan” National Skills Coalition, April 2017. Available at https://www.nation-alskillscoalition.org/resources/publications/file/WBL-Learning-Policy-50-State-Scan.pdf

55 Delaware’s Fiscal Year 2017 budget allocates $700,000 to the state’s Department of Labor to support work-based learning, with a focus in the mechanics and manufacturing fields. In Virginia, an Executive Order provides $400,000 annually for Registered Apprenticeship programs in occu-pations that have not traditionally provided apprenticeships, including information technology, cyber security, and professional and business services. See Wilson and Mehta, 2017.

56 Wilson and Mehta, 2017. Note that Arkansas’ tax credit is limited to employers who hire youth apprentices. Maryland’s tax credit was created after the Wilson and Mehta scan.

57 American Association of Community Colleges Fast Facts. Available at https://www.aacc.nche.edu/research-trends/fast-facts/.

58 Dan Broun, “Community Colleges as Change Agents in the Rural South,” MDC, November 15, 2017. Available at http://stateofthesouth.org/2017/11/15/community-colleges-as-change-agents-in-the-rural-south/.

59 “College Students Aren’t Who You Think They Are,” Center for Law and Social Policy, 2017. Available at https://www.clasp.org/sites/default/files/publications/2017/08/2017June_CollegeStudentsArentWhoYouThinkTheyAre.pdf.

60 Katie Brown, “Putting Pell Grants to Work for Working Students” National Skills Coalition, March 2018, available at https://www.nationalskillscoalition.org/resources/pub-lications/file/Putting-Pell-Grants-to-work-for-working-students-1.pdf.

61 Brooke DeRenzis and Rachel Hirsch, “Job-Driven Financial Aid Policy 50-State Scan,” December 2016. Since report was published, Maryland has adopted job-driven financial aid policies.

62 Claire Suggs, “Troubling Gaps in Hope Point to Need Based Aid,” Georgia Budget and Policy Institute, September 2016. Available at https://gbpi.org/2016/gaps-in-hope-point-to-need-based-aid/.

63 See information about the New Economy Workforce Credential Grant at http://www.schev.edu/index/institutional/grants/workforce-credential-grant.

64 Bryan Wilson, “Alignment Policy: 50 State Scan,” National Skills Coalition, December 2016.

65 Individual colleges use additional grants from local funders or the state’s Workforce Enhancement Training Fund.

66 Davis Jenkins, Matthew Zeidenberg, and Gregory S. Kienzl, “Building Bridges to Postsecondary Training for Low-Skill Adults: Outcomes of Washington State’s I-BEST Program” Community College Research Center, May 2009.

67 Theresa Anderson et. al., “New Evidence on Integrated Career Pathways: Final Impact Report for Accelerating Opportunity” Urban Institute, June 2017. Available at https://www.urban.org/research/publication/new-evidence-integrated-career-pathways.

68 “Mastering the Blueprint: State Progress on Workforce Data,” Workforce Data Quality Campaign, November 2016. Available at https://www.nationalskillscoalition.org/resources/publications/file/NSCWDBlueprintFINAL.pdf.

69 Workforce Data Quality Campaign, November 2016.




73 E.g., the Alabama Workforce Council, Arkansas Governor’s Workforce Cabinet, Kentucky’s Education and Workforce Cabinet, and North Carolina Board of Postsecondary Credentials.

http://files.eric.ed.gov/fulltext/ED430083.pdf

http://www.urban.org/sites/default/files/alfresco/publication-pdfs/411907-The-Benefits-and-Challenges-of-Registered-Apprenticeship-The-Sponsors-Perspective.PDF




https://www.dol.gov/apprenticeship/toolkit/toolkitfaq.htm

https://www.dol.gov/apprenticeship/toolkit/toolkitfaq.htm

https://www.dol.gov/featured/apprenticeship/grants

https://www.dol.gov/featured/apprenticeship/grants

https://www.nationalskillscoalition.org/resources/publications/file/WBL-Learning-Policy-50-State-Scan.pdf



https://www.aacc.nche.edu/research-trends/fast-facts/.

https://www.aacc.nche.edu/research-trends/fast-facts/.

http://stateofthesouth.org/2017/11/15/community-colleges-as-change-agents-in-the-rural-south/.

http://stateofthesouth.org/2017/11/15/community-colleges-as-change-agents-in-the-rural-south/.

https://www.clasp.org/sites/default/files/publications/2017/08/2017June_CollegeStudentsArentWhoYouTh



https://www.clasp.org/sites/default/files/publications/2017/08/2017June_CollegeStudentsArentWhoYouThinkTheyAre.pdf

https://www.nationalskillscoalition.org/resources/publications/file/Putting-Pell-Grants-to-work-for-working-students-1.pdf



https://gbpi.org/2016/gaps-in-hope-point-to-need-based-aid/.

https://gbpi.org/2016/gaps-in-hope-point-to-need-based-aid/.

http://www.schev.edu/index/institutional/grants/workforce-credential-grant

http://www.schev.edu/index/institutional/grants/workforce-credential-grant

https://www.urban.org/research/publication/new-evidence-integrated-career-pathways.

https://www.urban.org/research/publication/new-evidence-integrated-career-pathways.

https://www.nationalskillscoalition.org/resources/publications/file/NSCWDBlueprintFINAL.pdf

https://www.nationalskillscoalition.org/resources/publications/file/NSCWDBlueprintFINAL.pdf

http://www.workforcedqc.org/resources-events/resources/2016-mastering-blueprint-state-progress-workforce-data/

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